Good morning, ladies and gentlemen, and welcome to CommVault’s Second Fiscal Quarter 2013 Earnings Call. At this time, all participants are in a listen-only mode. Following today’s presentation instructions will be given for the question-and-answer session. At this time for opening remarks and introductions, I would like to turn the call over to Mr. Michael Picariello, Director of Investor Relations. Please go ahead, sir.

Good morning. Thanks for dialing in today for our fiscal second quarter 2013 earnings call. With me on the call are Bob Hammer, Chairman, President and Chief Executive Officer; Al Bunte, Chief Operating Officer; and Lou Miceli, Chief Financial Officer. Before we begin, I’d like to remind everyone that statements made during this call, including in the question-and-answer session at the end of the call that relate to future results and projections, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations. Actual results may differ materially due to a number of risks and uncertainties, which are discussed in our SEC filings and in the cautionary statement contained in our press release and on our website. The company undertakes no responsibility to update the information in this conference call under any circumstance. Our earnings press release was issued over the Wire Services earlier today and it has also been furnished to the SEC as an 8-K filing. The press release is also available on our Investor Relations website. On this conference call, we’ll provide non-GAAP financial results. A reconciliation between the non-GAAP and GAAP measures can be found on Table IV accompanying the press release and posted on our website. This conference call is also being recorded for replay and is being webcast. An archive of today’s webcast will be available on our website following the call. I will now turn the call over to our CEO and President, Bob Hammer.

Thanks Mike. Good morning everyone and thanks for joining our second quarter earnings call a day earlier than expected, as everybody knows we have a little bit of weather here. In fact Al and I were part of the evacuees last night. We had to find some shelter somewhere else. And most of our office facility is shutdown, but it looks like we’re in good condition in our follow through on the call. I hope everybody on the call is safe and stays safe until this – the storm is over. Regards to our quarter, we had another very solid quarter. Our positive results are indicative of continued good underlying demand and the strength of our product, services and distribution across all geographies. We saw strong growth in the Americas, Europe and our U.S. Federal margins. We are seeing a positive business momentum continuing into our Q3. Let me briefly summarize our financial results. For the quarter, total revenues were $118.2 million, up 21% year-over-year and up 6% sequentially. Software revenue was $59.2 million, and grew 24% year-over-year and 9% sequentially. We also had an excellent results from our services and support organizations. Services revenue was $58.9 million, and grew 19% year-over-year and 3% sequentially. For the quarter, non-GAAP operating income or EBIT was a record $28.8 million up 63% year-over-year. Non-GAAP EBIT margins were 24.4%. Non-GAAP diluted earnings per share for the quarter were $0.38. Our 21% year-over-year revenue growth was primarily due to the combination of three major factors. Share increases in very large big data related enterprise deals and commercial and government accounts, penetration into the managed service provider market and the increasing recognition in the market of CommVault’s leading technology and support capabilities. These factors combined with good sales execution, have enabled us to significantly outpace…

Thanks Bob and good morning everyone. I will cover the key financial highlights of the second quarter of fiscal year 2013. Total revenues for the quarter were $118.2 million, representing an increase of 21% over the prior year period and 6% sequentially. For the quarter, we reported software revenue of $59.2 million, which was up 24% or $11.4 million over the prior year period, primarily driven by enterprise transactions. Software revenue represented 50% of our total revenues for the current quarter, compared to 49% in the prior year period. Enterprise deal flow momentum and funnel growth continued to be strong. Enterprise deals, which we define as deals over a $100,000 in software revenue were 56% of license revenue in the quarter, representing year-over-year growth of 26% and 9% sequentially. The number of enterprise deals grew by 6% year-over-year and 28% sequentially. Our average enterprise deal size was approximately $247,000 during the current quarter, compared to $208,000 in the prior year period and $288,000 in the prior quarter. Our SMB business grew 21% year-over-year and 9% sequentially, primarily on the strength of our global SMB channel partners. During Q2, our growth was driven by strong demand for our virtualization, source-side deduplication and snap-based modern data protection solutions. We continue to see strong demand for our capacity-based licensing models, which makes it much easier for our customers to purchase multiple elements of the Simpana platform. Approximately two-thirds of our software revenue in the current quarter was comprised of capacity-based licensing models. Our maintenance attach rates and renewal rates remain very strong. Services revenue for Q2 was $58.9 million, an increase of 19% year-over-year and 3% sequentially. For the quarter, revenue from U.S. operations generated 63% of total revenues resulting in a 24% year-over-year increase, while revenue from international operations generated the balance,…

Thank you very much, Lou. I want to take a few – make a few comments, on what is driving demand for data – our data and information management software and services, and a brief summary of our next-generation technology. The key points I want to make here is to try to give you a perspective of why we are continually and consistently outpacing the market. As I have said in the past, what the industry calls Big Data or the massive growth and complexity of data is breaking traditional processes and procedures. Big Data is overwhelming IT networks and storage infrastructures and increasing legal, compliance and regulatory business risks. As a result, there is a growing consensus among enterprise and governmental customers that the IT challenges must be solved globally and holistically by completely reengineering IT infrastructures and utilizing global shared services models across all IT environments. These shared service models tend to be driven our requirements for data growth management, cost control, operations management, compliance and eDiscovery and more efficient and effective technical support. Concurrently, there is a major trend in the SMB and mid markets for customers to outsource the data management needs to manage service providers or MSPs. In conjunction with the reengineering – reengineered IT infrastructures for shared services, models and MSPs, commercial and government enterprises are implementing next-generation data and information management solutions. CommVault was the world’s only fully integrated data and information management software platform leads the market in providing such next-generation solutions. Our platform enables customers to holistically and effectively implement comprehensive automated global data and information management solutions. The benefits customers derive from deploying our platform include; lower cost, high reliability, better support, better ability to recover data and lower business compliance and regulatory risk. In addition, we enable customers to…

Thanks Bob. Before the operator opens up the line for questions, I will like to let everyone know that both Lou and Brian Carolan are available for questions during today’s question-and-answer session. Operator, can we please open up the line for questions.

Thank you. We will now begin the question-and-answer session. (Operator Instructions) The first question is from Joel Fishbein from Lazard. Please go ahead. Joel Fishbein – Lazard: Good morning guys and congrats on another strong execution. Bob just on your comments regarding the next version of Simpana and some of the features, two – just two questions there. Number one is, have you guys put some parameters around how much this may grow your total addressable market? And also – and are you – will you be selling into the same group of IT buyers that you’re selling into now and then the third part of it is – will this also be capacity-based pricing?

Yes, on the addressable market these are round numbers, but it’ll grow the addressable market about 100% – another 60% round numbers. Joel Fishbein – Lazard: Okay.

The second question, Joel was... Joel Fishbein – Lazard: Was just regarding, I’m just curious about, will you be selling into the same – the same IT buyer, I mean or is there somebody – or you have to go deeper inside the IT organization to sell some of the additional features?

We’ll sell beyond the current IT structures within our customer base. I’d hold – obviously we’d get into analytics, we’ll be selling to more-and-more of the business related functions within both commercial enterprises and government, so a much different buyer and with our mid-market products like IntelliSnap, we’ll be selling to different buyers as well. Joel Fishbein – Lazard: Okay. And then the last part of that is just, will that also be on the capacity-based pricing as well or will you offer it both ways or how will that be offered?

Well, I’m going to let Al to expand this a bit. The answer is, yes, and then we’re going to do some other things – greater things with pricing as we get into some of these other market segments. So, Al why don’t you expand on that?

Yeah, that’s accurate, Joel. Yeah, the core pricing will remain capacity based. We have some ideas on different elements of the data management areas particularly around archive and some of the innovative things we’re doing there. But obviously, as we get into the analytics, as Bob said, we’ll probably utilize more traditional allies, more traditional application-based pricing, which would be seat or end-user based type of methodologies for applying our pricing. Joel Fishbein – Lazard: Great. Thank you.

Thank you. And the next question is from Aaron Rakers from Stifel Nicolaus. Please go ahead. Aaron Rakers – Stifel, Nicolaus: Yeah, thanks guys and also congratulations on a good quarter. First, if I can touch on the implied operating margin, I can appreciate the reinvestment or the up investments in the model. Just trying to understand how you are thinking about the operating margin relative to what you’ve historically set around your target model. Now that we’re actually sitting at a – last quarter being a mid-teens operating margin. And it looks like implying about a 300 basis point or so decline, second half versus first half.

Okay. So let’s take the longer view, Joel, I mean, Aaron, we are being consistent and focusing the company on hitting this $1 billion revenue target with low to mid 20s operating margins and we’ve set programs to achieve that objective. Obviously, we got a little bit ahead ourselves here. And Lou pointed out in his comments; we’re doing this in a number of ways, better focus and sales segmentation, in a better sales productivity, some other cost saving methods. So we are clearly, I would say a little bit ahead of our path on achieving those earnings operating margin objectives. The issue near-term is that clearly given the strength of our business and the opportunity we have not only with our current outlook, but with next generation of the Simpana platform coming to market. We’re going to take this opportunity to invest pretty heavily across the board, as Lou said in his comments and sales (inaudible) capabilities and our support marketing. So – and almost all segments of the business we’re going to invest to strongly position the company going into FY 2014, in spite of the current macro environment and that will have a negative downward pressure on operating margins, as will now you’re getting into the latter part of the year where you have, from a compensation standpoint, accelerators and from a sales commission standpoint, we’re going to be paying higher commission. So, you put all that together, you’re going to see some lower operating margin in the second half versus what we saw in Q2. Aaron Rakers – Stifel, Nicolaus: Well, I understand. The second question I’d like to understand a little bit more, managed service provider or MSPs, where that currently stands. I think last quarter you had talked vaguely about that getting up to close to 10% of total revenue. Where do you stand on that and how do we think about that go-to-market strategy or how we should think about that in the context of some of the upcoming product launches?

Well, clearly, we’re establishing a leadership position in MSPs due to our platform, because we’re the only company out there with a platform and it aligns really well with the things that MSP is trying to accomplish in relation to data and information management. So, what we – that segment of the market that as far as we can see will be extremely high growth and what we are going to be doing differently is organizing to get more focus globally on that segment of that – the MSP customers across the globe going into FY 2014. So, we think that over time that will be very significant part of our business; and again over time, by the time we get to that $1 billion target, it should be well over 10%.

Thank you. The next question is from Aaron Schwartz from Jefferies. Please go ahead. Aaron Schwartz – Jefferies: Good morning. I just had some questions on some of the new market segments that you talked to with Simpana 11. Can you also talk about how that coincides maybe with the segmentation, your sales force will through that continue next year? Do you sort of build that with some different functionality in the sales force to address this in market segments?

Yeah, I mean, our sales segmentation and focus changes every year tied to our product innovation and areas of the market that we think have high growth potential for us. So, clearly, we will be providing either overlays or some more segmentation to accomplish those objectives. One of them that I already mentioned is, we’re doing this right now as we speak with Simpana 9 in the mid market. We’ve got a lot more focus on our mid markets distributors and resellers and our developing products to fit those segments of the market. And our channel strategies and segmentation strategies aligned with that. So, Aaron, you’ll see that a continual evolution from us in that regard. Aaron Schwartz – Jefferies: Okay. And then second question I had is your growth has been exceptionally impressive given that it’s all been organic historically, if you enter into any of these new markets would you expect that to continue?

Well, from our – in regard to our $1 billion plan right now, it is all organic. We see a clear path to achieve that objective both top and bottom-line with organic growth. And so let’s not forget what our objective is here as a company. And number one is to lead the market with innovative products that have high value to our customers and differentiate us from our competitors, with the objective of significantly outpacing the market in growth and profitability; if we continue to do that, what do we do? We create enormous amount of shareholder value. So just getting big to get big has no value to this company. If we see innovative technology that enables us to better serve our customers and provide better shareholder value, we will consider it, but to-date we have not – we’ve looked at a lot of different opportunities and have elected not to transact any acquisitions, because we didn’t see the value in doing so, for our customers or our shareholders. Aaron Schwartz – Jefferies: Okay, terrific. Thanks guys and be safe.

Thank you. The next question is from Alex Kurtz from Sterne Agee. Please go ahead. Alex Kurtz – Sterne: Yeah, just two questions on the competitive front. Did your sales force note any change, Bob, from EMC out of – EMC World and VMworld with some of the changes with Avamar? And then anything on Symantec and Veritas, given sort of the structural changes going on well – with that company?

No. I mean, EMC is a competitor to us, with products like Avamar and Data Domain. We obviously compete effectively against EMC, otherwise we wouldn’t be having this kind of growth rate. We expect to continue to outpace EMC in innovation, that’s on the one hand. On the other hand, we – our attach rates with EMC, with products like Isilon and VNX, are really high. So on the one hand, EMC is a big competitor and they try to kill us every day. On the other hand, we partner quite effectively with them in the market in providing EMC customers with best-in-class solutions. In regard to Symantec, the answer is no. I mean on occasion, as I’ve said many times, we see waves of, I call it significant price cutting from Symantec as they try to hold on to their installed base and we’re seeing some of that now. But other than that, we have not seen any changes. Alex Kurtz – Sterne: Thanks, Bob.

Thank you. The next question is from Glenn Hanus from Needham. Please go ahead. Glenn Hanus – Needham: Yeah, good morning and congrats. First on OpEx, could you just talk a little more – I mean you really came well under, at least my expectations there. Could you talk about where the savings really came from, did you pull back on spending so much, just given the environment? And then I think you already addressed the investment question going forward. Thanks.

Yeah, Glenn, we didn’t pull back on anything. We may have underachieved spending. In other words, we just – we had set some objectives and we didn’t achieve them, not because we were pulling back, but we just didn’t get them done in the timeframe we wanted to get them done, and we are addressing that. I think we can be a little bit more effective in executing some of those, and those are forward strategies. So there was no pullback at all, it was just – so we did have an impact of that and we had a higher than planned impact tied – as we mentioned, tied to our sales segmentation. Glenn Hanus – Needham: Okay, could you maybe just talk a little bit more about some of the distribution partners; Fujitsu, Hitachi, I don’t know if there’s anything new with developments with NetApp? Thanks.

Fujitsu, as I said, continues to progress extremely well. That partnership started well, and continues to track well. And we expect high growth and again, this is mainly in the German, Austria, Switzerland area, but really good solid traction there. NetApp, again, I said I wouldn’t talk about this anymore, but clearly – the two companies are making a lot of progress. And I would – and we had a pretty good quarter with NetApp last quarter. I would expect to see continued growth and collaboration with NetApp over the coming year. And maybe a year from now, it could get interesting, but it’s clearly improved pretty significantly. And there is nothing much to say about the other partners right now. Glenn Hanus – Needham: Okay, great. I think that does it for me, you addressed some of the others. Thanks.

Thanks.

Thank you. And the next question is from Greg Dunham from Goldman Sachs. Please go ahead. Greg Dunham – Goldman Sachs: Hi, thanks for taking my question. I wanted to talk – you were pretty specific about cautionary language and about competitors that are seeing kind of macro pressures in the space, but clearly in the results it doesn’t show up in your numbers. Question is, are you seeing any deals with which – you mentioned that, I guess that October started out strong, was that due to anything around deal slippage, or are you seeing any signs in your own business of weakening? Thanks.

No. Gary, we seem to be defying the laws of physics here. We have basically not seen deal slippage. We have seen continual growth in our funnels. My only point is, if almost everybody else in our industry is seeing something, at some point we’re likely to see something, that was my point on my comments, but to-date, maybe a little bit harder to get approvals through, but we seem to be able to accomplish that and close these deals at an increasing pace. So – but my words of caution are real. I mean we have an environment that clearly has deteriorated and you can see that – not knowing – more broadly in the economy, and certainly from results of companies that have reported in our industry, and we’re just keeping our eyes open here and wanted to make sure that our shareholders understood that, but we are an outlier at the moment and we may not always be an outlier. Greg Dunham – Goldman Sachs: That’s helpful. One quick follow-up, how should – I guess remind us what is typical when you have a release like a Simpana 10, in terms of the impact on quarterly numbers. Is there an impact on the quarter before, is there an impact on the quarter of, how should we think about that from a timing perspective? Thanks.

We never see impacts from the quarter before, this is – I can’t even count now, but somewhere in the 30, number 30 plus major release we’ve had. We’ve never seen negative impacts on prior quarters. Some releases we’ve seen very sharp uptick when we introduced source-side dedup (ph) for example, and we saw a pretty strong uptick. My comment on this one, this one is deeper, broader, will have a much bigger impact to the company of any release we’ve had, but it’s likely to occur over time. So I don’t expect to see big near-term spikes, but it will help us to, one, solidify our position in the industry and enable us to achieve really good solid well-above industry average growth rates for quite a long period of time. This one has a – what I call, a lot of legs to it. Clearly, it provides a foundation for us to hit our $1 billion revenue target, this one and its extension. So we’re really confident about the release and excited about it, but again, I don’t expect a near-term spike as we release it. Greg Dunham – Goldman Sachs: Okay, thank you.

Thank you. And the next question is from Michael Turits from Raymond James. Please go ahead. Michael Turits – Raymond James: Hey guys, good morning. First of all, Lou congrats to you and thanks on a great, great job as CFO.

Thank you, Mike. Michael Turits – Raymond James: And then, as far as the next quarter goes, does your comfort with the estimates extend to next quarter? And how quickly does OpEx begin to ramp? Typically third quarter is – fiscal quarter is a pretty good ramp of 7% to 10% in OpEx growth. So should we see that kind of typical ramp coming up ahead, more or less?

You’ll see a pretty good solid ramp of OpEx in Q3 versus Q2. Michael Turits – Raymond James: Okay. And you said you’re also comfortable with the Street numbers for next quarter’s results as well?

Well, what we – what we said was, we are comfortable with consensus for – FY 2013’s consensus, but – so you can draw your models between Q3 and Q4, but we’re definitely comfortable with the full-year Street consensus. Michael Turits – Raymond James: Okay. Then just one small thing on partnership; I don’t know how big HDS is, but they did make a small acquisition in this space themselves. Just wondering on how that partnership is going? I can’t recall how large it is and then what you are talking about – how that acquisition might impact the partnership?

Well, I mean HDS as we’ve stated on the call is, it’s not strategic, it’s opportunistic; both companies seem to be doing pretty well with it. It will remain opportunistic and no, I don’t think this particular acquisition, since it’s relatively low in functionality. Well, it’s not an enterprise product and we’re 100% focused on enterprise with HDS. Michael Turits – Raymond James: Okay. Things seem great, congratulations. Thanks a lot.

(Operator Instructions) And the next question is from Ryan Bergan from Craig-Hallum. Please go ahead. Ryan Bergan – Craig-Hallum: Thanks. Just wondering if you can address what your plans are for cash, the balance has grown nicely here. Clearly you increased the stock buyback and you have the land purchase and the building of the new campus ahead of you. But any other plans for cash we can think of, anything along the lines of acquisitions? I know you haven’t been an acquisitive company, but how can we think about your uses of cash beyond what I’ve just mentioned?

Yeah, I mean in that order, it’s – clearly we’re committed to building this campus and this new headquarters, which is substantial, because it’s not only a new headquarters, but establishes a foundation for future growth for the company. So that’s a very substantial investment. Fortunately, we’re generating a lot of cash, so even net of that investment, we are still going to end up with a lot of cash. And the second priority after that is, opportunistically, to take advantage of the – when the market gets irrational, to go in and buy back stock. That’s not a program, it’s when the market gets irrational, we’ll come in and act accordingly. And then third, there will still be significant cash available for an acquisition if it makes sense, but it’s not a proactive part of our strategy, as I said earlier. If it fits, if it offers significant additional customer value, if it enables us to create additional shareholder value, we’ll consider it, and because we’re pretty – we’re a pretty experienced M&A team here, but we haven’t found anything to date. Now I’ll make a comment, as you get into business value creation and analytics, you get into that side of the business, there may be some opportunities that will open up for us. And the other point that everybody should be aware of, because it’s very significant, is this platform now becomes open versus proprietary, which enables a lot of third parties to write to it and use it as a repository on, I’ll call it the back-end, or we can export information at our top end to other applications. When you start doing that, it does enable us to think about bringing in other functionality to the platform without having to integrate with it. So we’ll see, but again it’s not a – it’s not, at this point, a proactive top priority for the company. Ryan Bergan – Craig-Hallum: Thanks, Bob, and stay safe, guys.

Thanks.

Thank you.

This concludes the question and answer session for today’s call. Ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.